Trump Wants To Cut Regulations By 75 Percent. Former Agency Lawyers Are Skeptical.

Trump Wants To Cut Regulations By 75 Percent. Former Agency Lawyers Are Skeptical.

President Donald Trump has vowed to cut federal regulations by 75 percent to drive business growth, boasting about that number—“maybe more,” he said—at a White House meeting this week with chief executives of a dozen U.S. companies, including Ford Motor Co. and Dell Technologies Inc.

Lawyers who served in top positions at federal agencies during the Barack Obama and George W. Bush administrations, however, are skeptical.

Regulations are “expositions of law, not declarations of law,” said Seth Harris, a former U.S. deputy secretary of labor who also served as acting secretary of the department in the Obama administration.

“They take a statute or an executive order and explain how the statutory language or the executive order language applies,” Harris said in an interview this week. “So 75 percent sounds like it’s going to be unleashing business and removing the regulatory yoke from their necks, but if we eliminate 75 percent of regulations what we’d end up with is mass confusion, unclarity and litigation.”

The Trump administration hasn’t outlined in any detail its plan to eliminate 75 percent of federal regulations. An executive memo published Tuesday by the White House was titled “Streamlining Permitting and Reducing Regulatory Burdens for Domestic Manufacturing.” A White House representative wasn't reached for comment.

Congress itself has the power to cut some regulations that were implemented before the presidential transition. Reuters reported Wednesday that Republicans on Capitol Hill are moving to erase rules in the securities and labor arenas, among other areas.

One big question—at least in the eyes of former agency lawyers—is how the new administration would measure success. By reducing the overall number of regulations or rules on the books? Or perhaps by eliminating 75 percent of the total financial compliance burden?

Then there’s a question about how cuts would be distributed across agencies—whether or not the administration would attempt to take more rules from particular agencies than others.

Thomas Barker, a partner at Foley Hoag in Washington who has served as acting general counsel at the U.S. Department of Health and Human Services and general counsel of the HHS Centers for Medicare & Medicaid Services, said drastic regulatory cuts at his former agencies would unleash numerous problems.

“If CMS were to just say: we’re just going to eliminate 75 percent of regulations, it would shut down Medicare and Medicaid programs, and that’s just not realistic or reasonable to expect,” said Barker, who served in the George W. Bush administration.

There’s also the matter of consequences of removing or changing regulations for businesses that have already invested in compliance, said Kathryn Thomson, a partner at Morrison & Foerster in Washington who has served as general counsel to the U.S. Department of Transportation and chief counsel of the Federal Aviation Administration.

“You have to question, is it really economically worth it?” Thomson, who served in the Obama administration, said. “Because some of these rules have been in place for a long time and businesses have made plans and strategies to come into compliance with these rules and there are significant costs for un-ringing the bell.”

Thomson pointed to the recent federal fuel economy greenhouse gas emissions standards for cars. Automobile companies, she said, are following that plan for fleets of new vehicles they are bringing to market.

Former agency lawyers also saw challenges for the Trump administration in the sheer amount of work it would take to nix regulations. Although Trump can unilaterally with the stroke of a pen overturn executive orders signed by Obama, agencies must go through the long—and often complex—rulemaking process to undo many existing regulations. That process will include the solicitation of public feedback.

“It’s an overwhelming task because you have to go through notice and comment rulemaking and as part of that, you have to justify why you rejected the comments,” said William Schultz, a partner at Zuckerman Spaeder in Washington and former general counsel to HHS in the Obama administration. “It’s a very large task to eliminate regulation. I think to even set a goal of eliminating ten percent of regulations would probably be very ambitious—75 percent sounds unrealistic to me.”

There’s also a risk of litigation from groups that want to challenge the revocation of regulations. Adam Kushner, a partner at Hogan Lovells in Washington and a former director of the U.S. Environmental Protection Agency’s civil enforcement office and air enforcement division, said the Trump administration could face litigation pushback on stated goals such as reducing carbon emissions rules.

“Individuals, organizations, and those in industry that are interested in carbon regulations are not going to be going away,” Kushner said. “And the courts will provide checks on the ability to just affect policy changes without allegiance to the statute and/or facts and science.”

Newsletter

Subscribe to our mailing list

About Us

News On Compliance is a news aggregation blog, collecting artiles relevant to compliance, legal, Fintech, AML and other topics from around the web. We do not own any articles unless stated otherwise. All blog posts are provided with a source link to the original article.